What are financial incentives? Briefly state any four financial incentives with examples.
What are financial incentives? Briefly state any four financial incentives with examples.
Financial incentives are money that provides the satisfaction of physiological and safety needs of employees. The four financial incentives are :
(i) Pay and allowance: Pay means salaries while allowance is the amount allotted for food travel and daily expenses for employees. Example for allowance include meal coupons or vouchers.
(ii) Profit sharing: Profit sharing means that a company shares a proportion of a percentage of their profits with their employees. For example, companies distribute shares of stock in a company based on the performance of the company.
(iii) Bonus: Bonuses are provided to employees when they meet specific targets determined based on the annual performance of the business. For example, the salesperson is provided a bonus after a sales target is achieved.
(iv) Retirement benefits: Retirement benefits are monthly payments made to employees after retirement from the work and it includes provident funds, insurance, and medical benefits.
(v) Perquisites: Perquisites are incidental payments, benefits, privilege or advantage given to employees over and above their salaries. For example, gratuity paid membership to a club, or free use of company car are examples of perquisites.
Financial incentives are money that provides the satisfaction of physiological and safety needs of employees. The four financial incentives are :
(i) Pay and allowance: Pay means salaries while allowance is the amount allotted for food travel and daily expenses for employees. Example for allowance include meal coupons or vouchers.
(ii) Profit sharing: Profit sharing means that a company shares a proportion of a percentage of their profits with their employees. For example, companies distribute shares of stock in a company based on the performance of the company.
(iii) Bonus: Bonuses are provided to employees when they meet specific targets determined based on the annual performance of the business. For example, the salesperson is provided a bonus after a sales target is achieved.
(iv) Retirement benefits: Retirement benefits are monthly payments made to employees after retirement from the work and it includes provident funds, insurance, and medical benefits.
(v) Perquisites: Perquisites are incidental payments, benefits, privilege or advantage given to employees over and above their salaries. For example, gratuity paid membership to a club, or free use of company car are examples of perquisites.
